The personal blog of Reyn Bowman, a Durham NC resident, 40-year veteran of community-destination marketing and still an explorer in community sense-of-place. Opinions expressed here are those of the author.

Tuesday, September 23, 2014

Prompted by an Old Playbook To Look Back on a Transformation

The desperation being felt across the country by community destination marketing organizations (DMOs) isn’t new; it is just coming from a new source.

Feeling the effects of immense overbuilding during the last decade, performing arts halls are now borrowing from a decades-old playbook used by hotels when that visitor-related industry overbuilt in the 1980s and early 1990s.

Seeing the chatter online has also piqued my interest to look back into studies conducted for the communities I served during my now concluded career.

But first a word about the side-effects of overbuilding and how data such as this can serve a preventative and also illuminate the emergence of a destination.

Overbuilding leads tourism-related organizations to demand that DMO resources meant for the community as a whole be redirected instead to their exclusive benefit.

Blinded by insecurity, they ignore that the way visitor-centered economic development is supposed to work is that a DMO’s role is to tell the overarching story to get the community as a whole on the list for visitor consideration.

First and foremost, this is to fuel the overall business climate and tax base.

As first-line beneficiaries, it is the responsibility of individual businesses, organizations and facilities such as these to then harvest their share.

Trying to monopolize and divert resources meant for the community as a whole is cannibalistic and ultimately self-destructive but it’s what happens as a result of overbuilding.

Ironically, it is cookie-cutter mainstream facilities/events which, lacking differentiation, then in desperation turn and seek to hollow out the very core of community appeal, destroying the very source of their sustenance.

Their “sameness” from community to community, whether it is formula hotels, convention centers, stadiums, and now performance halls, is at the heart of their internecine desperation.

They come to fear that only by monopolizing community assets can they survive.

This is why defending community marketing from special interests has been the singularly most important challenge for DMO executives and governing boards for more than four decades.

One of the first things we did while jumpstarting a DMO for Durham, North Carolina where I spent the last two decades of my career was to immediately challenge “conventional wisdom” by developing and analyzing data.

As had been the case in two of my previous DMO startups, we were bombarded with anecdotal opinions, e.g. “No one will come to Durham for anything but business;” “Durham will forced to feed on the barebones after Raleigh is sated;” “Durham is just a stopover;” and my personal favorite: “There is nothing to do in Durham.”

Because I had seen this drill before, it was clear that one of the first things I needed to do was to scrounge through old studies for data while immediately engaging tourism researchers at NC State University to begin regularly mining primary research for relevant data.

One study I found published from 1976 interviews estimated that less than 5% of visitors staying in Durham hotels came here for the purpose of leisure/pleasure, or about 155,400 visitors in all.

The author projected that by 1990, which was coincidentally, the Durham marketing agency’s first full year of operation, this number would have increased less than 2% a year over that 14 year span to about 198,000.

I knew the numbers were soft because the consultant, as nearly all did back then, had only the observations of local hoteliers to rely on. I knew from experience that few hoteliers at the local level had a handle on why their guests traveled to a location.

Instead, they often used “rules of thumb” that had by then been passed down from generation to generation of managers, especially those going to hotel schools.

Unfortunately, these had never been verified or updated with actual research.

I suspected that this 1976 number was probably over estimated and the 1990 number was underestimated, based on past research I had conducted during two previous start-ups to promote other similarly sized communities.

The study was pretty good for that era, if a bit old school. I’ve seen far worse over the years. Telling was that it didn’t make any attempt to include daytrip visitors or excursionists as they were called back then.

Of course, it had been only two years prior to that 1976 study that a group of us joined forces to get what was then the International Association of Convention Bureaus, the International body for DMOs, to add “& Visitor” to its name, something overlooked since the 1890s and overdue since the 1930s.

Those 1976 observations made more than twenty years before Durham’s DMO start-up also estimated that in 1976, 19.6% of Durham’s overnight visitor traveled here on business, 22.5% for medical purposes and 46% for conventions.

It projected that by our 1990 start up, leisure visitation would have fallen to just over 4%, business travel would have risen to 42.8%, medical travel was projected to increase to 34% and conventions - if a convention center were built - which it had been in 1989, were projected to increase from from 18.8% to 50.5%.

Something just didn’t seem right about those numbers. Our initial inventories documented that Durham already had in place a wealth of cultural and historic visitor features above and beyond the many found on the campuses of Duke and North Carolina Central universities here.

I could hardly wait to see what the actual data revealed.

In the meantime we had our hands full teaching festivals, historic sites, performance halls and nature areas both to be visitor-ready and how to harvest their share of visitors.

Durham’s first ever visitor census, which was completed in 1990 (one of the first anywhere) could only delve into overnight visitation that first year but it gave me data to compare.

By 1992, updates included daytrip visitors of 50 miles away or more and a couple of years later, Durham became one of the first in the nation to measure daytrip visitors from closer than 50 miles.

The data collected that first year revealed that the percent coming for business (excluding conventions) was actually 29% vs. the 42.8% projected 14 years earlier. Medical travel was 16% vs. 34%. Those attending conventions stood at 2.9% vs. the 18.8% projected.

In just a little more than two years, as Durham ramped up community destination marketing for the first time, the proportion coming for business held even at 30.9% while conventions grew to nearly 6% and the proportion coming for medical treatment fell as a percentage to 11.2%.

Visitors to Durham for leisure/pleasure (excluding VFR and student’s families) had also grown from 14% to 16.8%. I exclude those two groups of leisure visitors for comparison, but actually they were still important groups among whom we promoted greater circulation and spending.

We could also tell from the data, which of the visitor features were catching on to what we had been teaching them about how to harvest visitors here for other purposes.

The hardest part was to get them to accept the difference between those prompted by an activity vs. those who would take it in during the course of trips for other purposes.

Repeatedly, studies show that the destination is the first decision made when planning a trip, even if an activity is a prompt. Even day trippers are filtering a decision through image, value/cost, how to get around and safety before getting to uniqueness, entertainment or even culinary reputation.

This all adds up to why destination marketing must never be sacrificed to fill seats. But evaluating the percentage that are prompted by an activity vs. taking it in on trips for other purposes is also a good way to measure efforts to generate circulations.

While the pool of overall visitors had also already grown substantially, following those initial years of promotion, a closer looks showed that sports events had surged from nominal to 3.6%, festivals held even, sightseeing fell to 3.6%, shopping to 2.7%, entertainment to 2.2% and nature/outdoor recreation to 1%.

All were harvesting more visitors, but some organizations and facilities had obviously caught on faster than others, and because of turnover and development, a DMO’s work in this regard would never be done.

The data had another impact, though. It helped slow the speculative overbuilding of hotels, because although there would continue to be a healthy annual increase, feasibility consultants were now using data to better inform development decisions.

Unfortunately, convention centers and performance halls often pushed forward with ulterior motives in mind such as propping up property value. Many have yet to learn this crucial lesson enabled by communities that still don’t collect data.

By 1995, nearly all of Durham’s named restaurants, festivals, performance halls and stadiums were harvesting 70% or more of their patronage from visitors.

The evolution of a comprehensive community calendar, now a must-have best practice, was helping events better calibrate expectations for underwriting, attendance and volunteers, as well as optimize date selection and tempering overdevelopment of events.

By 1998, just eight years after beginning to ramp up Durham’s first promotion, the community was already exceeding its fair share for conventions and meetings, but the majority of even overnight visitors to Durham were now here for leisure/pleasure purposes.

Overall, average stay and party size were improving.

With the proportion of overall business travel - especially conventions - in obvious long term decline by then, the writing was on the wall.

It was clear that Durham had to try to maintain higher than fair market share in those declining segments while racing to keep visitation growing from year to year by tapping more and more into the proportion of travelers taking leisure/pleasure trips.

It was also clear by that time that mainstream events, formula stores and franchise architecture were beginning to hollow out or put at risk the indigenous districts, events, natural infrastructure and cultural ecosystem that gave Durham its authenticity and appeal.

The first sign was when the capacity of heretofore vibrant facilities and events began to erode while seemingly oblivious developers and creators continued to pile on more and more.

Last year, the proportion of overnight visitors here for leisure/pleasure had increased through effective community marketing many times over, to nearly 73%.

Overall by person stays, overnight visitors to Durham are now 29% for business (excluding conventions,) still above fair market share, 8% for medical treatment and 15% for conventions (also above market share and nearly twice the national average.)

Among day trip visitors, not only has participation levels quintupled for festivals and sports events has nearly tripled but nature/outdoor and performing arts have each increased six times what it was early on, by five times even before the fabulous DPAC.

Shopping participation has grown nearly 15 times over. More telling though, is that destination marketing is also getting visitors to circulate beyond the thing that may have been their main focus.

Nearly a third of those who take in performing arts came for other purposes, as did 40% of shoppers, 20% of those taking in sports events and 60% of those attending festivals.

Even a third attending a convention or meeting did so on trips for other purposes.

Lodging guest rooms have grown by a stable one and a half times what they were when community marketing commenced, just 40% of the speculative rate they had been before good data began to inform decisions.

However, the desperation from over development has now shifted to cultural entities such as theaters and festivals. Some have yet to learn that lesson or when they were suppressed by the first entities to use the playbook, some are eager to use now to suppress others.

Hopefully, here and across the country, they soon will. People are now overwhelmingly drawn to communities with a sense of authenticity including indigenous facilities and events.

This is true even for those who ultimately take in mainstream events that can be seen almost anywhere, unaware that overdevelopment of these is putting what drew them in the first place at risk.

Ironically, once that authenticity and unpretentiousness is lost, they will go elsewhere as will the mainstream facilities and events, leaving communities not worth visiting.

Before it’s too late in more and more cities, hopefully they come to understand their desperation is of their own making and will fall back into their place in the fabric of place.

Until then, communities that rely on data and sense of place must weather another storm of special interests.